Monday, February 4, 2013

Moringa market trends - An eye opener!

Last year, Moringa started yielding at 6 months. Our gross yield was not significant since the trees were still so small and young. Nonetheless, it was a delight to see long, smooth, green pods. These smaller volumes were not economically feasible for Chennai or other bigger trading markets at the time. Later, during October - December months, the yield further decreased due to monsoons and mild temperatures.

Profuse flowering was seen in January and we are all excited to see what we have in store as far the yield is concerned. It was about the right time to analyze the market and seek potential retail customers in the big town - Chennai. So, we made a trip trip to Koyambedu Vegetable market in Chennai last week to get a sense of the prevailing rates and seasonal procurement practices.

We were able to connect with a couple of big wholesalers/commission agents and discovered that the current wholesale selling rates (end of January) was about Rs 35 - 45 per Kg. The rate is expected to remain in this range for the next 2-3 months. During summer, the average rate drops to Rs 20-25/Kg due to higher supply from within the state, primarily Theni, Dindigul and Tirunelveli.

Moringa from western states starts coming into Tamil Nadu during monsoon months, starting from August through December. Due to reduced local availability, the rates shoot up to Rs 80 - 120 per Kg. This little exercise gave us clear insight of the market dynamics for Moringa trading and exposed opportunities to maximize revenue based on seasonal availability from other parts of the country. Having comprehended the wholesale trends, we visited some of the bigger vegetable shops and retail chains. What we found was quite baffling for us - Moringa was retailing at Rs 70 - 90 per Kg. Contrast this with what we got at farm gate recently - Rs 15-18/Kg! This demonstrates the disparity in the entire supply chain, unfortunately this was somewhat expected. Producers have to bridge the gap between farm-to-fork by embracing innovative, aggressive marketing techniques to maximize returns.

This trip was an eye opener for sure and it was encouraging to see retailers welcoming producers for direct sales, without middlemen. Till the time, producer gets significantly more than farm gate rate and the retailer procures cheaper than wholesale rate, I would say it is a win - win situation for all! Everyone in the supply chain earns more and the inflationary trends are under check.

At this time, we are looking for the most efficient and cost effective way to transport produce from Sivagangai to Chennai. Any recommendations from those who have done it in the past? At Savera Farms, we can definitely use everyone's help and guidance. :)

Finally, my thoughts go back to our goal to form a group of producers to leverage such opportunities collectively - connect with us directly if you are interested in working together. Feel free to share encouraging market trends or stories where producers have opportunities to bridge the farm to fork (retail) gap.

19 comments:

  1. This would possible in community based farming Being alone producing there is huge struggle for direct selling

    Reason is broker has multiple contacts , product purchaser will hesitant to take risk for direct purchase while he is sure ,he will get items from some way or other ..

    What is the land prices falling near ur areas ,Probably like minded people can combine and make a community farming..

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  2. Small and medium farmers cant afford sales and marketing setup which is easily affordable in case of big / corporate farmers, but in India 95% farmers are small and medium farmers and corporate farming is a long way to go.

    It is a big issue and needs professionally organized collective efforts for the farming community from within themselves.

    Professionally managed farmer growers association could be the solution for this kind of problem. The association should have legal brokers license and a marketing outlet in the wholesale market in addition to this association can adopt all other possible sales and marketing strategies for the benefit of member farmer growers.

    I have faced this long back and have stopped competing small and medium farmers by planting eucalyptus in my 90 acres family holding still I have 45 acres awaiting suitable project/crop.

    Community supported farming could be the another way out ( especially for organic / natural farms ).



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  3. Community farming and direct sales to consumer is the key. In Pune couple of large housing societies have started allowing farmer groups to sell their produce on their premises. I think we have to make community farming work for us farmers to be successful.

    The farmer groups will also help farmers coordinate and regulate the supply side. Point in case - In last couple of days the prices of onion have come down significantly due to oversupply in Pune market. Yesterday night I saw at least 10-15 trucks carrying onions on their way to market.

    Good luck and keep us updated.

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  4. Dear Johri,

    From all your posts I could sense that you are adding on investment and building resources to reap over a long run. Can you make a post on how you manage your day to day operation from short duration crops/activity or how you are managing your cash liquidity for day to day operation of farm.

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    2. Dear Mr Palaneeswar,
      In Agriculture, ROI cannot be calculated or realized on short term basis. There is a gestation period for the efforts to bear financial fruits. Now that my infra, planting is complete, my efforts are directed to shape the income streams, so as to service my bank commitments and maintenance expenses. Moringa has started to yield productively and hopefully, I should be able to that with Goat and Moringa.
      Frankly, it is a rough road and one needs to be determined, patient and persevere through the journey. It is essential that first few years one should have capacity, determination and family backing emotionally, financially and physically.

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    3. Perfectly said Mr. Johri.

      In the unstable market for the farmers that too swindled by the middlemen, and if one need to sustain ...yes it is a rough road which needs determination, careful planning, patient and perseverance. Specially family backing up at all times is much more important.

      Wish you a smooth and prosperous road in the near future.

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  5. WE PROFITABLE GREEN SOLUTION OPERATING IN SIVAGANGAI DISTRICT FOR SEVEN YEARS ,WE FORMED A FARMERS CLUB WITH THE SET OF PROGRESSIVE AND INNOVATIVE FARMERS FROM SIVAGANGAI AND RAMNAD DISTRICT AND AGRICULTURE ENGINEERS ,EXPERIENCED TECHNISIONS EVEN EXPORTERS ARE IN THIS CLUB IF YOU ARE INTERESTED PLEASE DO JOIN US

    greenagrow@gmail.com
    greeagrow.blogspot.com
    facebook-greenagrow

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    1. Green Agrow - Do you also trade in livestock? I think the volume power of your consortium would be great in the livestock market.

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  6. since you have all the feasble structure like redsoil,warm climate,water sourse you can try pommegrant ,pls research on that too also .

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  7. Pretty good findings on the Moring Market trends. As Mentioned; farm to Retailers would be ideal. Logistics would have to be worked out.
    Regarding group of producers with similar goals, I'm not sure if it would work out well with a large group of people. I believe the maximum that would come out of it bringing a mandi or 2 close by. Perhaps you should check out some of the wholesale markets/mandis in Dindigul as I have seen lot of Moringa farms in that area. See how they work and check how it would benefit.
    Perhaps you should also check out some of the Exporters in nearby areas and check the feasibility of a better price without much overhead.

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  10. Hi

    Check for the train feasilibilty, i think it will work out cheaper.

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    1. Manamadurai is the closest rly station which is 30 km away, for loading freight. Thanks for the inputs everyone, appreciate your help and ideas.

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  11. Isn't there something similar to - http://www.hopcoms.kar.nic.in existing in Chennai /TN ?

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    1. Renjith - Would you know anyone at Hopcoms who would be influential enough to assist with trading fresh veggies and products like Moringa?

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    2. I don't have any contact there but I have heard from folks that they have procurement centers in multiple places around Bangalore - you can try reaching their Lalbagh center and would be interested to hear from you about your experience !

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